The correct combination is Always Encrypted, TDE, and enforced TLS 1.2, because this layered approach addresses all three data states: Always Encrypted protects sensitive columns like credit card numbers in use and at rest on the server by keeping encryption keys client-side, TDE encrypts the entire database at rest transparently, and TLS 1.2 secures data in transit between the application and database. On the AZ-500 exam, this scenario tests your understanding that Dynamic Data Masking only obfuscates output without encryption, and that Always Encrypted with enclaves, while enabling richer queries, introduces performance overhead that may not be necessary for simple equality searches. A common trap is assuming column-level encryption alone covers at-rest protection, but it does not—TDE is required for that. Memory tip: think “TDE for the whole file, Always Encrypted for the sensitive cells, TLS for the wire.”
AZ-500 Secure compute, storage, and databases Practice Question
This AZ-500 practice question tests your understanding of secure compute, storage, and databases. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
You are designing a secure database solution for a financial application using Azure SQL Database. The database contains highly sensitive columns (e.g., credit card numbers). Which combination of features should you implement to protect data at rest, in transit, and in use, while minimizing performance impact?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Always Encrypted (with deterministic encryption for equality searches), TDE, and enforce TLS 1.2.
Option C is correct because Always Encrypted protects data in use and at rest on the server, transparent data encryption (TDE) protects data at rest, and TLS enforces encryption in transit. Column-level encryption alone (Option A) does not encrypt at rest automatically. Dynamic Data Masking (Option B) only obfuscates in query results, not encryption. Option D (Always Encrypted with enclaves) is for richer queries but may have performance overhead.
Key principle: Count usable hosts — not total addresses — and remember that the network and broadcast addresses are not available to hosts in standard IPv4 subnets.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Always Encrypted with secure enclaves, TDE, and enforce TLS 1.2.
Why it's wrong here
While this provides richer computations, it may have performance impact and is not strictly necessary for basic protection.
✗
Dynamic Data Masking, TDE, and enforce TLS 1.2.
Why it's wrong here
Dynamic Data Masking does not encrypt data; it only masks output.
✓
Always Encrypted (with deterministic encryption for equality searches), TDE, and enforce TLS 1.2.
Why this is correct
Always Encrypted protects data in use and at rest on the server; TDE encrypts at rest; TLS enforces in-transit encryption.
Column-level encryption using Azure Key Vault, TDE, and enforce TLS 1.2.
Why it's wrong here
Column-level encryption is not native to Azure SQL; Always Encrypted is the recommended approach.
Common exam traps
Common exam trap: usable hosts are not the same as total addresses
Subnetting questions often tempt you into counting all addresses. In normal IPv4 subnets, the network and broadcast addresses are not usable host addresses.
Trap categories for this question
Command / output trap
Dynamic Data Masking does not encrypt data; it only masks output.
Detailed technical explanation
How to think about this question
Subnetting questions test whether you can identify the network, broadcast address, usable range, mask and correct subnet. Slow down enough to calculate the block size correctly.
KKey Concepts to Remember
CIDR notation defines the prefix length.
Block size helps identify subnet boundaries.
Network and broadcast addresses are not usable hosts in normal IPv4 subnets.
The required host count determines the smallest suitable subnet.
TExam Day Tips
→Write the block size before choosing the subnet.
→Check whether the question asks for hosts, subnets or a specific address range.
→Do not confuse /24, /25, /26 and /27 host counts.
Key takeaway
Count usable hosts — not total addresses — and remember that the network and broadcast addresses are not available to hosts in standard IPv4 subnets.
Real-world example
How this comes up in practice
A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Count usable hosts — not total addresses — and remember that the network and broadcast addresses are not available to hosts in standard IPv4 subnets. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this AZ-500 question in full detail.
Review block sizes, usable host formulas (2^n − 2), and how to find network and broadcast addresses for /24 through /30. Then practise related AZ-500 subnetting questions on CIDR, address ranges, and subnet selection.
Secure compute, storage, and databases — This question tests Secure compute, storage, and databases — CIDR notation defines the prefix length..
What is the correct answer to this question?
The correct answer is: Always Encrypted (with deterministic encryption for equality searches), TDE, and enforce TLS 1.2. — Option C is correct because Always Encrypted protects data in use and at rest on the server, transparent data encryption (TDE) protects data at rest, and TLS enforces encryption in transit. Column-level encryption alone (Option A) does not encrypt at rest automatically. Dynamic Data Masking (Option B) only obfuscates in query results, not encryption. Option D (Always Encrypted with enclaves) is for richer queries but may have performance overhead.
What should I do if I get this AZ-500 question wrong?
Review block sizes, usable host formulas (2^n − 2), and how to find network and broadcast addresses for /24 through /30. Then practise related AZ-500 subnetting questions on CIDR, address ranges, and subnet selection.
What is the key concept behind this question?
CIDR notation defines the prefix length.
About these practice questions
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These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. You are designing a secure data solution for a financial application. The data must be encrypted at rest, in transit, and in use. You choose Azure SQL Database. Which combination of features should you implement?
hard
✓ A.Transparent Data Encryption, enforce TLS, and Always Encrypted
B.Azure Information Protection, Dynamic Data Masking, and column-level security
C.Always Encrypted, Azure Active Directory authentication, and Azure Information Protection
D.Transparent Data Encryption, Dynamic Data Masking, and Azure Active Directory authentication
Why A: To encrypt data at rest, use Transparent Data Encryption (TDE). For in-transit, enforce TLS. For in-use, use Always Encrypted. Option C is correct. Option A is wrong because Dynamic Data Masking is for masking, not encryption. Option B is wrong because Azure Active Directory authentication is not encryption. Option D is wrong because column-level security is for access control.
Last reviewed: Jun 20, 2026
Question Discussion
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